SASSA grant increases have not been significant enough to alleviate household financial pain due to the rising cost of living. The government is contributing to the deepening financial crisis households are facing with its low increases to its SASSA (SA Social Security Agency) social grants that make it difficult for consumers to afford the rising price of food, electricity and transport.
This was the warning from Economic Justice and Dignity Group programme coordinator Mervyn Abrahams following the release of the organisation’s latest Household Affordability Index. The index, a survey that tracks the price of food across South Africa, showed that prices had risen on average by 3,8% over the past six months between September 2020 and February 2021.
“Twenty-twenty-one will see a deepening household affordability crisis with core household expenses like transport, electricity, and food, increasing way above inflation, whilst wage increases will continue to remain low,” Abrahams said.
Abrahams said SASSA grants had not been increased sufficiently to assist households with the rising cost of living.
“The Minister of Finance, and by implication, government, and the ANC, are contributing to this deepening crisis by setting the annual increments on the old age grant and child support grant, incomes used by households to buy food for children and pay for essential services, way below inflation in Budget 2021,” he said.
Abrahams said conditions at household level had worsened since the start of the pandemic.
“Jobs have been lost, wages cut, and money must spread further,” he said.
The February 2021 Household Affordability Index, which tracks food price data from 44 supermarkets and 30 butcheries, in Johannesburg (Soweto, Alexandra, Tembisa and Hillbrow), Durban (KwaMashu, Umlazi, Isipingo, Durban CBD and Mtubatuba), Cape Town (Khayelitsha, Gugulethu, Philippi, Delft and Dunoon), Pietermaritzburg and Springbok (in the Northern Cape), showed that:
In February 2021: The average cost of the Household Food Basket was R4 001,17
Month-on-month between January 2021 and February 2021 the average cost of the Household Food Basket decreased by R50,03 (-1,2%).
Over the past six months between September 2020 and February 2021 the average cost of the Household Food Basket increased by R144,84 (3,8%).
However, Abraham’s said the recent month-on-month decline in prices would be momentary and it also came on the back of a R48,78 price hike between December 2020 and January 2021.
“February is always a difficult time for consumers who have the additional pressures of finding money to cover education costs, and therefore have less money to spend on groceries. Retailers which target the low-income market tend to respond with more specials during this period,” Abrahams said.
“February also, consistent with our historical food price trends, tend to be lower due to subdued vegetable prices. We therefore expect the decrease in the cost of a household food basket in February 2021 to be short-lived, whilst cautioning that higher fuel prices and electricity prices, are likely to push food prices upwards in the near future.”